Henry Ford, Innovation, and That “Faster Horse” Quote

“If I had asked people what they wanted, they would have said faster horses.”

We’ve all been in conversations on the topics of creativity and innovation when Henry Ford’s most famous adage is (excuse the pun) trotted out, usually accompanied by a knowing smirk and air of self-evidence. Battle lines are quickly drawn. One side vehemently argues the merits of innovating vis-à-vis customer feedback; the other argues that true innovation is created by singularly gifted visionaries who ignore customer input and instead manufacture innovation based solely on their prophetic vision for a better future.

Having grown weary of both sides of the debate, I was curious; did Ford utter those words? And what did they mean for the early days of the Ford Motor Company, and by extension, for entrepreneurs looking to learn about how to innovate?

Let me dispel with the suspense; it doesn’t appear that Henry Ford ever actually uttered this famous and polarizing phrase. We have no evidence that Ford ever said those words. (My methodology in determining the non-existence of this quote is a footnote to this blog post.)

However, even if Ford didn’t verbalize his thoughts on customers’ ostensible inability to communicate their unmet needs for innovative products — history indicates that Henry Ford most certainly did think along those lines — and his tone-deafness to customers’ needs (explicit or implicit), had a very costly and negative impact on the Ford Motor Company’s investors, employees, and customers.

Henry Ford’s genius lay not in inventing the assembly line, interchangeable parts, or the automobile (he didn’t invent any of them). Instead, his initial advantage came from his creation of a virtuous circle that underpinned his vision for the first durable mass-market automobile. He adapted the moving assembly line process for the manufacture of automobiles, which allowed him to manufacture, market and sell the Model T at a significantly lower price than his competition, enabling the creation of a new and rapidly growing market.

But in doing so, Henry Ford froze the design of the Model T. Freezing the design of the Model T catalyzed the speed of this virtuous circle, allowing him to better refine the moving assembly line process, which in turn allowed him to cut costs further, lower prices even further, and drive the growth of Ford Motor Company from 10,000 cars manufactured in 1908 to 472,350 cars in 1915 to 933,720 cars in 1920.

As long as the Model T’s design remained ahead of the competition, as long as it competed on price, and as long as the market’s needs remained static, this was a successful and disruptive innovation strategy, since Ford had no compelling reason to innovate in any other sphere other than cost- and price-reduction.

But everything changed with the onset of the innovations introduced by General Motors in the 1920s, which took the direct opposite of Henry Ford’s tack of “Any color … so long as it is black” and is best summed up by Alfred Sloan’s consumer-research driven “A Car for Every Purse and Purpose,” which aimed to produce cars for distinct market segments aided by:

Installment selling

Used car trade-ins

Closed car models

Annual model changes

In light of these, Ford persevered stubbornly with his cycle (now no longer disruptive nor virtuous) and as such, Ford’s response to these new innovations can only be described as tepid at best. The Ford Motor Company did introduce a closed-body Model T, and did so without significantly altering its open-body design, which most observers at the time felt amounted to a reluctant afterthought.

In 1921, the Ford Motor Company sold about 2/3 of all the cars built in the U.S. By 1926, this share had fallen to approximately 1/3. And in 1927, when Ford belatedly responded (at tremendous financial cost and internal strife) to changes in the market’s tastes and competitive innovation by shutting down production temporarily to re-tool his factories and bring the Model A to the market, that percentage fell to about 15%.

It was clear what people wanted, and it wasn’t faster horses. It was better cars, with better financing options. I attribute Ford’s failure to respond in a timely and effective manner to competitive innovation in the marketplace to an attitude summed up in a quote he never uttered.

Now you might think that the lesson to be learned from Henry Ford’s faster horses is that when pursuing innovation, it is perilous to ignore customers. However, that is most decidedly NOT the point of this post.

Yes, some customers in certain types of businesses are quite capable of verbalizing precisely what sort of innovative product one could build and sell them. And of course, customers in other types of businesses are wholly incapable of verbalizing, with any sort of fidelity whatsoever, what they need and why they need it.

An innovator should have understanding of one’s customers and their problems via empirical, observational, anecdotal methods or even intuition. They should also feel free to ignore customers’ inputs. Because by now it should be clear that Ford’s adherence to his vision of the mass-market car and how to materialize that vision was instrumental in both his early success in growing Ford Motor Company as well as his later failure to respond in a timely and effective manner to rapid innovation in the marketplace.

The real lesson learned was not that that Ford’s failure was one of not listening to his customers, but of his refusal to continuously test his vision against reality, which led to the Ford Motor Company’s failure of continuous innovation, resulting in a catastrophic loss of market share from which it never recovered.

2002 in “Beyond Disruption: Changing the Rules in the Marketplace” by Jean-Marie Dru 2003 in “Added Value: The Alchemy of Brand-led Growth” by Mark Sherrinton

In Ubiquitous Computing Fundamentals (2009), edited by John Krumm, in Chapter 6, titled “From GUI to UUI: Interfaces for Ubiquitous Computing” authored by Aaron Quigley, the quote is sourced to “The First Henry Ford: A Study in Personality and Business” (1970) by Anne Jardim.

Tom Wood contacted the Henry Ford Museum to ask about the provenance of the quote. He received the following reply:

“In the past research on this topic has not yielded satisfactory results either for the researcher or the research staff. Mr. Ford wrote numerous articles for a variety of periodicals and newspapers and the quotes attributed to him were varied and often unsubstantiated.”

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